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Sally Beauty Goes Solo

MELROSE PARK, IL—A Break with its manufacturer will allow store, product line expansion.

By Debra Hazel | Updated on June 19, 2006

MELROSE PARK, IL—Alberto-Culver will spin off its Sally Beauty Supply Co., separating its distribution business and retail stores into separate companies, and allowing Sally to expand its retail stores and products offered within them.

The transaction is expected to be complete in December. Alberto-Culver shareholders will continue to own 100% of the Alberto-Culver business, and 52.5% of Sally Beauty Supply. A fund managed by Clayton, Dubilier & Rice (CD&R) will invest at least $575 million to acquire the remaining 47.5% of Sally. When the spin-off is complete in December, the independent Sally Beauty Supply will be a $2.3-billion business with 2,465 Sally Beauty stores and 825 Beauty Systems Group (BSG) outlets.

“CD&R sees opportunities at accelerating the Sally growth rate, not only in the US, but internationally,” said Gary Winterhalter, president of Sally Beauty Co., during a conference call Monday. “They also see opportunities on the Beauty Systems Group side of the business.” The deal also can expand Sally’s retail product lines.

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